Why wouldn't this situation cause a cascading event?
Because other forms of media like films and movies don't really have popular stuff on IA, so those studios have no reason to sue them. IA was an easy target for publishers due to it hosting popular books.
I think someone should make a video service alternative, though I am aware how massively difficult that is. To me even though it is useful, internet archive is kinda a monopoly for archiving videos. Something else alongside it would help a lot. I don't consider youtube it, because that site takes down stuff a lot.